Neither side was willing to divulge the financial details of the plan, which will see the archipelago return to its Viking roots.
“In our mind, this deal was a no-brainer. Shetland still has strong ties to Norway and with our fertility rate at an all-time low, we could certainly use the population boost,” Norway's newly-appointed minister of global expansion, Erik Gundersen, said in a statement.
Shetland is actually closer to Norway than it is to the Scottish capital of Edinburgh and was under Norwegian control from the 9th century until it was transferred to the Scottish King James III in 1472.
As part of the deal, the roughly 23,000 inhabitants of the island will be given the option to become Norwegian citizens or to relocate to mainland Scotland within 180 days of the deal's formal completion.
Gundersen said that he expects the majority to embrace Norway, pointing to the strong ties that still exist between both places.
Just over a century ago, when Norway celebrated its 1905 independence, Shetland officials sent King Haakon VII a letter saying that "Shetlanders continue to look upon Norway as their mother-land, and recall with pride and affection the time when their forefathers were under the rule of the Kings of Norway."
“We know that a lot of people on Shetland still identify with their inner Viking and that Scotland often looks to Scandinavia for inspiration. This would give them instant access to the vaunted Nordic model. Plus, they'd barely have to change their flag,” he said.
Gundersen said that he expects a strong return on its investment, pointing to how the Shetland Islands and Norway have both been hurt by falling oil prices.
“We're both taking a bit of a beating on the global oil market, but between the Shetlands' booming mackerel business and our salmon trade, we reckon we can provide seafood to all of Europe,” he said.
Shetland resident Davey Finley told The Local that he had mixed feelings about the deal.
“Well, I supported the 2014 independence referendum and while I was disappointed that we couldn't break free from the UK, this Norway deal might be the next best thing. Those Scandinavians seem so easy-going,” he said.
“On the other hand, their language sounds rather difficult to learn and I'm not wild about paying Norwegian tax rates,” Finley added.
Gundersen said Norway's next goal would be the Faroe Islands to the northeast of Shetland and suggested that preliminary talks were already underway with Denmark.
“They are hoping we will renegotiate our 1963 deal on splitting up the North Sea, but that sounds all too steep. We are hoping to get them to go along with something a little more realistic, like maybe just giving up our claim to the Viking ruler Rollo and agreeing to stop trying to outdo them on immigration policies,” he said.
Update, 12.13pm: This story, if you haven't guessed by now, is not actually true and is part of The Local's longstanding tradition of April Fools' jokes. Although if Shetlanders are interested, they are welcome to get in touch and we'll see what we can do.